JERUSALEM (Agencies) - Israel has agreed "on the principles" of a ceasefire proposal, raising hopes of an end to its conflict with Palestinian activists in Gaza. Israel also warned thousands of people in the Rafah zone on the Egyptian border to leave or face airstrikes. "The challenge now is to get the details to match the principles," BBC quoted Israeli spokesman Mark Regev as saying on Wednesday. Israel wants to stop rocket attacks on southern Israel and to stop Hamas smuggling weapons into Gaza via Egypt, while Hamas says any ceasefire deal must include an end to Israel's blockade of Gaza. Israel said it was not sure how long the diplomatic process would take and that a working arms embargo on Hamas was needed. The Israeli security cabinet welcomed the Franco-Egyptian initiative to end the 12-day-old fighting in Gaza but stopped short of endorsing it. "Israel thanks the Egyptian President and the French President for their efforts to advance the solution to end the Hamas activity from Gaza and stop weapons smuggling from Egypt into Gaza," government spokesman Mark Regev said. "Israel sees positively the dialogue between Egyptians and Israelis in order to advance these issues," he said. In an interview with the Sky News TV, Israeli President Shimon Peres also said his country is studying proposals for ending the Gaza conflict while warning that "paper alone cannot change the situation". Reacting to the latest diplomatic activity at the UN, he reiterated that Israel did not want to prolong the conflict. Top Israeli ministers also approved an even tougher war on Hamas despite warming to a new ceasefire initiative and briefly silencing its guns to let Gaza City residents hunt for food and fuel. Israeli Defence Minister Ehud Barak was given the green light by Israel's security cabinet to order a deeper offensive into Gaza towns as part of the campaign to halt Hamas cross-border rocket attacks, a senior defence official told AFP. But Barak has also decided to send an envoy to Cairo on Thursday (today) to get details on an Egyptian ceasefire plan, which secured widespread international backing amid growing anxiety over the civilian toll now close to 700 dead. The cabinet meeting in Jerusalem "approved continuing the ground offensive, including a third stage that would broaden it by pushing deeper into populated areas," the official said. The final decision will be left with Barak, the official added. Israeli shelling and air attacks around Gaza City were halted for three hours as a humanitarian gesture. Hamas also halted rocket attacks. People and cars quickly filled the streets of Gaza City and long queues formed outside bakeries which soon ran out of bread. Aid groups sent dozens of truckloads of food and fuel across the border during the truce. But Israeli army equally quickly resumed bombing, inflicting new deaths. A man and his three sons and a nephew were killed in one attack at the Jabaliya refugee camp, according to Gaza medics. The Israeli military dropped leaflets warning residents around the southern Gaza town of Rafah to leave the area ahead of planned bombings of tunnels leading into Egypt, witnesses said. The Israeli army "demands those who live (in the areas bordering Egypt) to leave their houses," the leaflets said in Arabic. "You have until 8:00am (0600 GMT)" on Thursday (today). The leaflet said that the military "will bomb the area due to its use by Hamas activists to (dig) tunnels and to stock up" on arms. Amos Gilad, a top advisor to the Israeli Defence Minister, will go to Cairo on Thursday to discuss details of the plan, the defence official said. Mubarak outlined the plan after talks with French President Nicolas Sarkozy late on Tuesday. The proposal calls for an "immediate ceasefire," Israeli-Palestinian talks in Egypt on securing Gaza's borders, reopening border crossings and possible Palestinian reconciliation talks under Egyptian mediation. Despite the truce moves, Israel stage dozens more air raids targeting rocket-launching sites and gunmen. At least 694 people have now been killed, including at least 220 children, since the war erupted on December 27, Gaza medics say. More than 3,100 Palestinians have been wounded. Six Israeli soldiers have been killed in combat, while Israel says more than 100 Hamas fighters have died. Hundreds of rockets fired into Israel over the past 12 days have killed four people and wounded dozens. A worker for aid agency CARE International has died in an Israeli air attack in Gaza, the agency said Wednesday. Mohammed Ibrahim Samouni, who worked for CARE's food distribution project, was killed on Tuesday, it said in a statement. The ICRC also revealed on Wednesday that a Palestinian Red Crescent ambulanceman, Arafa Abdul Dayem, was killed and two others were wounded after being hit during an Israeli bombardment in the Gaza Strip on Sunday.